tinyurl.com/232axa

Rebecca Mowbray, The Times-Picayune
Friday February 08, 2008, 2:06 PM

Attorneys for the Louisiana Department of Insurance and Allstate met this morning to discuss longtime policyholders who say they lost their wind and hail coverage in a bait-and-switch, but no agreements were reached about how to handle the situation.

Warren Byrd, executive counsel for the insurance department, said he met with Tom Clark, an attorney from Adams & Reese LLP who represents Allstate in regulatory matters.

“They’re still trying to get a handle of how many people may be involved,” Byrd said. “We obviously want to know how big the problem is.”

The insurance department has received complaints from policyholders of Allstate and Encompass, Allstate’s brand of insurance sold through independent insurance agents. Customers say that when they took advantage of discount offers, their policies were re-written from Allstate Insurance Co. to Allstate Indemnity Co. or from Encompass Insurance Co. to Encompass Indemnity Co., and then Allstate used these changes to redefine them as new insurance clients who were eligible to be canceled.

Under state law, homeowners insurance companies have wide latitude to cancel people’s coverage as long as they’ve been with the company for less than three years. After that, companies are essentially married to their customers.

Allstate says that when customers chose to take advantage of discounts, they chose to take out new policies, and they assume the risks of any other changes that may come with that decision.

In December, after studying the issue for several months, the insurance department wrote to Allstate and ordered the company to reinstate the wind and hail coverage for 17 longtime customers who had complained.

The insurance department does not know how many people in this situation have received, or are on the list to receive, cancellation letters, so Byrd says the department has been amenable to allowing Allstate to take some additional time beyond the original one-month reply period to get a handle on the situation, since it could ultimately help more people.

“My guess is we’ll meet next week again,” Byrd said.

Insurer drops arguments that disaster loans void insurance appeals

By Rebecca Mowbray
Business writer

… Travelers, the state’s largest commercial property insurer, and State Farm, Louisiana’s largest residential insurer, came under fire last week from SBA Administrator Steven Preston and U.S. Sen. Mary Landrieu after the insurers filed motions in a class action lawsuit in New Orleans arguing that the plaintiffs didn’t have standing to sue because they had SBA loans.

Because SBA borrowers are required to assign any additional insurance proceeds to the SBA to repay the loan, the insurers argued that the borrowers had taken themselves out of the equation and lacked the legal stature to bring suit. Preston said he was "very, very concerned " and Landrieu, D-Louisiana, called the situation "outrageous, " saying that, if granted, the motions would allow insurers to get out of paying additional insurance benefits, leaving policyholders stuck with loans instead of insurance proceeds.
…

jim’s comment on another thread made me wonder if you know how much SF spends on advertising with gannett.

Before we turn the page on the deadly tornadoes in the south that killed fifty-seven this week, according to the latest count, it’s worth reminding business reporters and editors of a now-forgotten string of tornadoes that hit Oklahoma in May 1999. Those tornadoes –including one that unleashed 318 mph winds, the highest ever recorded –killed forty-eight, triggered 52,000 insurance claims, and caused $450 million in property damage.

In May 2006, seven years later, a jury in Grady County levied a $13 million judgment against a unit of State Farm Insurance Co., including $10 million in punitive damages, finding that the insurer "recklessly, " "intentionally, " and "with malice " denied legitimate claims brought by a class of Oklahoma policyholders. …

The adjusting firm was E.A. Renfroe. This is the case with the video of Lecky King taking the fifth.

*I Am An Ignorant Mechanic